| | |SWOT and PEST analysis on Cadbury PLC | | | | | Miaozhen Group : C Registration NO: 090243079 Module :FC009 Tutor :LIULU 16/07/2010 Word account: 1560 Abstract
This report aims to answer the research questions that I have asked with analysis the Cadbury PLC by using the SWOT and PEST method. There are six parts in my report. In the introduction, I introduce the background and history of Cadbury, and raise the research questions. I explain the concept of business environment, SWOT and PEST method in the literature review. Then I give analysis the Cadbury PLC by using the SWOT and PEST. I list both the internal and external environment of Cadbury. We can easily know the strengths, weaknesses, opportunities, threats of Cadbury.
We are clear about the political, social, economical, technological impacts of Cadbury. Then there is a discussion which talks about Cadbury’s market share and its productions. In the conclusion, I will answer the research questions, and give some of my opinions to solve these problems. Table of contents 1. Introduction1 2. Literature Review1 2. 1The concept and content of business environment1 2. 2The concept and application of PEST analysis1 2. 3 The concept and application of SWOT analysis1 3. SWOT and PEST analysis on Cadbury PLC2 3. 1SWOT Analysis2 3. PEST Analysis2 4. Production and Market Share Analysis and Discussion3 4. 1Production analysis and discussion3 5. Conclusion4 6. Reference4 1. Introduction Cadbury is a British confectionery company. It is famous for producing very good confectionery and soft drink. Cadbury was founded almost 200 years ago. And it was started by John Cadbury in 1824 with producing tea, coffee and drinking chocolate by himself. It was just a very shop during 1820 to 1860. From 1861 to 1940, Cadbury produced many new kinds of chocolate and soft drink, which were very popular in public.
It became more and more famous with the launch of its production. Cadbury go strength to strength these years and became one of the biggest brands in UK. As we all know, although it is one of the biggest confectionery companies in the world, Cadbury also has many weaknesses and threats, which are not helpful to its development. This report aim to analysis three questions: What are the reasons for Cadbury’s weaknesses and threats? How does Cadbury make good use of its strengths and opportunities? What should Cadbury do to solve its problems and become better?
I will answer these three questions in the report by using SWOT and PEST analysis. I collected the datum and sources from Cadbury’s official website. Besides, I have read some report and news which are related to the history and development of Cadbury. They provided many useful evidences so that I can get the answers of my research questions. 2. Literature Review 1. The concept and content of business environment Business environment is important for running business. It includes both internal and external impacts.
We analysis business environment in such as its nature, location, price of products and so on. And we should also know the socio-cultural aspects, the political framework, the legal aspects and the technological aspects. All of these aspects, we call them business environment. 2. The concept and application of PEST analysis We analysis a company’s external environment in four factors: political factor, economic factor, social factor and technological factor. We call this method PEST analysis. 2. 3 The concept and application of SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the strengths, weakness, opportunities, and threats of a company. With SWOT analysis, we can clearly get that what problems does a company has. What should a company do to solve the problems. They can more about its internal environment which may have effect on its business. 3. SWOT and PEST analysis on Cadbury PLC 1. SWOT Analysis |Strengths |Weaknesses | |Cadbury is the largest global confectionery company. Cadbury just produce confectionery and soft drink while its | |Cadbury has more than 9. 9% market share around the |competitor such as Nestle has many kinds of products. (case4)| |world. (case3) |High production cost | |They have a high financial strength. In 1997 its sales turnover|Cadbury is traditional in Europe, but its competitor Nestle | |is ? 7971. 4 million and it was almost 10% of all sales around |has greater international experience. | |the world. | |The confectionery, especial the chocolate that Cadbury produce | | |is very famous in the world. | | |Opportunities |Threats | |Market share in almost every country around the world. |Cadbury’s transportation cost is increasing. | |Cadbury’s soft drink is the leader in the market. The increasing internal taxes are also a big problem. | |They believe that innovation is very important. They produced |Cadbury’s competitor such as Nestle is still striving for | |many new products in the past years. |market leadership. (case4) | 3. 2 PEST Analysis |Political |Economical | |More and more people have awareness of food safety. |Cadbury launched a new chocolate bar when the world economic| |Any changes in laws and regulations may have effect on Cadbury. is relatively good. | |Cadbury should always follow the laws. For example, they cannot |The market share of Cadbury in confectionery is growing. It | |employ children or pay under minimum wage. |often sales well all around the world. | |Social |Technological | |More people prefer to eat healthy and cut down on soft drinks |High technology machines help Cadbury to produce more | |because of they want to keep a good figure. |production. |People like chocolate because of its good taste and famous brand. |Medias also help Cadbury a lot. Such as internet, | | |television. They make the advertisement more cheaper and | | |easier. | Case1. In 2009 Cadbury replaced some of the cocoa butter in their non-UK chocolate products with palm oil. Despite stating this was a response to consumer demand to improve taste and texture, there was no “new improved recipe” claim placed on New Zealand labels.
Consumer backlash was significant from environmentalists and chocolate lovers. Case2. To respond to changes in consumer tastes and preferences – more people prefer food with lower calories. R&D and product launches have led to sugar-free and center filled chewing gum varieties and Cadbury premium indulgence treat. Low-fat, organic and natural confectionery demand increases a lot. Case3. BOURN-VITA was launched in the UK in 1932 and subsequently launched in India in 1948. The year Cadbury-Fry (India) was founded as a private limited company. It was then launched in Nigeria in 1960.
It has a market share of 17% in India. And it is Cadbury Nigeria’s flagship brand. Case4. Nestle has said that current economic conditions would not affected on them and its share in UK confectionery market rise to 15. 65 with a 0. 5% growth this year. Kit Kat sales are up 18 per cent this year, in a national confectionery market which has grown by three per cent in the year to date. This still leaves Nestle in third position in the UK market behind bestselling Cadbury and Mars. 4. Production and Market Share Analysis and Discussion 1. Production analysis and discussion
As we all know, Cadbury just produce confectionery, and it is famous for its chocolate. They just focus on this kind of production. It is helpful to make Cadbury more famous in confectionery market. Many companies just focus on one product when it was not very large. Because in the preliminary stage , the most important thing is to enlarge its market share. Cadbury did very good in it. It successfully enlarged its market share in many countries. But it also has many disadvantages. It is not helpful for Cadbury to be the leader in the market.
Various productions may abstract more customers, and the company can get more profit and bring a dramatic growth. 4. 2 Market share analysis and discussion Cadbury just produced confectionery when it was a shop. It had no or small market share at the very beginning. But several years later, its chocolate and soft drink became famous and popular in public, and many liked its nice taste. Then Cadbury began to enlarge its market share. After launching its new kind of chocolate in 1932 in UK, Cadbury had a very large market. It has focused on confectionery for more than 200 years.
But its competitors do something better than Cadbury. They also have very large market share. Nowadays, Cadbury’s market share is still on a level without development. The biggest problem is they don’t have more customers. 5. Conclusion With clear analysis on Cadbury, we know its strengths, weaknesses, opportunities, threats. And we are clear about the political, social, economical, technological impacts of Cadbury. Now we can get the answers of my research questions. Firstly, what are the reasons for Cadbury’s weaknesses and threats?
Cadbury‘s single production structure is a big problem. The most important reason is its market share. Absolutely, it makes up great percentage of all market share, but it is not the only leader in confectionery market. They are just satisfied with this market share level. It is not necessary for Cadbury to enlarge its market share or do much competition with other companies. Secondly, how does Cadbury make good use of its strengths and opportunities? Cadbury has produced many kinds of chocolate bars, and most people like them so much. Its confectionery is very popular.
So they can produce more traditional taste chocolate with producing new productions. They should enlarge their customer group and make more people be interested in them. At last, in my opinion, they should produce something others except confectionery. It is helpful to get more customers and more profit. They can also try to produce different tastes chocolate in different areas, because it is impossible for different people to have the same taste. 6. Reference 1. http://www. businessteacher. org. uk/business-resources/swot-analysis-database/cadbury-swot-analysis/#_ftn1 2. ttp://www. cadbury. com/ourbrands/otherfavouritebrands/chocolate/Pages/Bournvita2. aspx 3. http://www. foodanddrinkeurope. com/Financial/Nestle-market-share-growing-despite-economic-downturn 4. http://www. cadbury. co. uk/cadburyandchocolate/ourstory/Pages/ourstoryFlash. aspx 5. http://www. cadburyinvestors. com/cadbury_ir/report/ 6. http://www. cadbury. com/pages/kraft. aspx? url=http://www. kraftfoodscompany. com/about/index. aspx 7. http://www. cadbury. com/ourbrands/Pages/Ourbrand. aspx ———————– 1 2 3 4 5
